Infosys Limited, one of India’s largest IT service and consulting firms, has once again taken a shareholder-friendly initiative by announcing a massive share buyback in 2025. Known for its consistent profitability and disciplined financial management, Infosys has a history of rewarding investors through dividends and share repurchases.
The Infosys Buyback 2025 represents the company’s largest-ever capital return program, emphasizing both its strong cash position and its commitment to enhancing shareholder value. This blog provides an in-depth look at the buyback’s price, structure, record date, objectives, tax implications, and its overall impact on investors.
Overview of the Infosys Buyback 2025
On September 11, 2025, the Board of Directors of Infosys approved a share buyback worth ₹18,000 crore. The company plans to repurchase its fully paid-up equity shares (face value ₹5 each) through the tender offer route at a price of ₹1,800 per share.
This represents a premium of nearly 19% over the market price at the time of announcement and involves a maximum of 10 crore (100 million) shares, which is about 2.41% of Infosys’s total paid-up equity capital.
The record date, which determines the eligibility of shareholders to participate, will be announced after receiving necessary regulatory approvals from SEBI.
Infosys’s Buyback History
Infosys has consistently returned cash to shareholders through buybacks over the years. Here’s a quick look at its previous buybacks:
| Year | Buyback Price (₹) | Size (₹ Crore) | Route | Shares Bought Back (Cr) |
|---|---|---|---|---|
| 2017 | 1,150 | 13,000 | Tender Offer | 11.3 |
| 2019 | 800 | 8,260 | Open Market | 11.05 |
| 2022 | 1,850 | 9,300 | Open Market | 5.0 |
| 2025 | 1,800 | 18,000 | Tender Offer | 10.0 |
The 2025 buyback is almost double the 2022 program, making it Infosys’s biggest capital-return move to date.
Why Infosys Announced This Buyback
Infosys follows a well-defined capital allocation policy, which includes returning up to 85% of free cash flow to shareholders via dividends or share buybacks.
The 2025 buyback fulfills multiple financial and strategic objectives:
1. Returning Surplus Cash
Infosys generates strong free cash flow from its operations worldwide. Rather than keeping excess cash idle, the company chooses to return it to shareholders, ensuring optimal capital use.
2. Boosting Per-Share Financial Metrics
By reducing the total number of outstanding shares, the buyback improves key performance indicators such as Earnings Per Share (EPS) and Return on Equity (ROE). These improvements can enhance the company’s valuation over time.
3. Strengthening Investor Confidence
Announcing a large buyback reflects the management’s confidence in the company’s future performance, even amid global IT spending slowdowns. It sends a positive signal that Infosys expects steady profitability and strong cash generation.
4. Offering Exit Opportunity
Shareholders looking to book profits can tender their shares at a premium to the current market price. This provides liquidity while enabling investors to realize immediate value.
5. Enhancing Long-Term Shareholder Value
A well-structured buyback supports long-term price stability, enhances investor sentiment, and indicates disciplined financial management—all crucial for sustained valuation growth.
Promoters Opt Out of the Buyback
A key detail in this buyback is that Infosys’s promoters, including co-founders Nandan Nilekani and Sudha Murthy, have opted not to participate in the ₹18,000 crore program.
This decision ensures that more public shareholders—both retail and institutional—get a chance to tender their shares. Additionally, when promoters abstain, their relative ownership percentage increases marginally post-buyback, even without acquiring new shares.
This move is symbolic of the promoters’ confidence in Infosys’s long-term growth trajectory and business fundamentals.
How the Tender Offer Route Works
The tender offer route is a transparent process regulated by SEBI, where the company invites eligible shareholders to sell their shares at a fixed price.
Step-by-Step Process:
- Record Date Announcement
Infosys will set a record date to determine which shareholders are eligible to participate in the buyback. - Submission of Shares
Eligible shareholders can tender (submit) their shares during the offer period through their broker or depository participant. - Acceptance Ratio
If the total shares tendered exceed the buyback size, acceptance will occur on a pro-rata basis. This means only a percentage of tendered shares will be accepted. - Settlement and Payment
Once finalized, accepted shares are extinguished, and the buyback amount is credited directly to the investor’s bank account. Unaccepted shares are returned to the demat account.
This mechanism ensures fairness and transparency while giving investors the option to decide whether to participate.
Impact on Retail Shareholders
Under SEBI regulations, 15% of the total buyback size is reserved for retail investors—those holding shares worth up to ₹2 lakh as of the record date.
Benefits:
- Higher Acceptance Probability: Retail investors benefit from a separate quota, which improves their chances of share acceptance.
- Premium Exit Option: The buyback price of ₹1,800 offers a significant premium over the prevailing market rate.
- Post-Buyback Gains: Investors who hold unaccepted shares may still benefit from the potential post-buyback price appreciation.
Limitations:
- Acceptance ratios could vary depending on participation levels. Historically, Infosys retail investors have seen acceptance ratios between 10–25%.
- If the market price rises close to the buyback price before the offer period, the arbitrage opportunity may narrow.
Tax Implications for Shareholders
Taxation plays an important role when considering participation in the buyback.
1. Tax on Accepted Shares
Profits earned from accepted shares are treated as capital gains:
- Long-Term Capital Gains (LTCG): 10% tax if the shares were held for more than one year.
- Short-Term Capital Gains (STCG): 15% tax if held for less than one year.
2. Tax on Unaccepted Shares
There is no tax liability on shares not accepted in the buyback. These remain with the shareholder for future sale.
3. No Buyback Tax for Company
As per the amended tax rules, the buyback tax previously paid by companies has been abolished. Now, shareholders directly bear the applicable capital gains tax on their individual income.
Investors should maintain demat statements and transaction records to ensure accurate tax filing.
Market Impact and Analyst Views
The announcement of the buyback immediately lifted Infosys’s stock price by more than 4% as investors welcomed the move. Analysts consider it a strategic step during a period of cautious sentiment in the global IT sector.
Short-Term Market Effects:
- Increased investor interest may keep the stock price stable near the buyback price until completion.
- Short-term traders may engage in arbitrage, creating mild volatility.
Long-Term Market Effects:
- Reduction in share count strengthens per-share metrics, potentially improving valuations.
- The promoter’s decision not to participate indicates internal confidence in sustained future performance.
- Market experts view this as a signal of balance sheet strength and prudent cash deployment.
Risks and Investor Considerations
While buybacks are generally positive, investors should be mindful of potential risks and trade-offs:
- Uncertain Acceptance Ratios:
A large number of shareholders participating can reduce individual acceptance percentages. - Temporary Price Movements:
Post-buyback, prices may normalize once the premium factor fades. - Tax Obligations:
Investors must account for capital gains tax when filing returns. - Opportunity Cost:
Selling during the buyback might result in missing future appreciation if Infosys’s growth strengthens post-buyback. - Timing the Record Date:
Investors should closely follow announcements to ensure eligibility before the record date.
Financial Strength and Future Outlook
Infosys continues to maintain a solid financial footing. Its cash and cash-equivalent holdings are among the highest in the Indian IT sector. Despite global headwinds in enterprise tech spending, Infosys’s diversified portfolio across digital transformation, AI-driven automation, and cloud migration ensures stable revenue visibility.
The buyback not only rewards shareholders but also reaffirms the company’s belief in its long-term profitability, operational efficiency, and strategic adaptability.
FAQs on Infosys Buyback 2025
1. What is the Infosys Buyback 2025 price?
The buyback price is ₹1,800 per equity share, representing a premium of nearly 19% over the market price during the announcement.
2. What is the total size of the buyback?
Infosys will repurchase shares worth ₹18,000 crore, making it the company’s largest-ever buyback.
3. How many shares will Infosys buy back?
A total of up to 10 crore (100 million) shares will be repurchased, accounting for about 2.41% of the total paid-up share capital.
4. What is the record date for the buyback?
The record date has not been announced yet. It will be declared after SEBI approval to determine shareholder eligibility.
5. What is the buyback route chosen by Infosys?
The buyback will be conducted through the tender offer route, allowing shareholders to tender their shares at the fixed buyback price.
6. Will Infosys promoters participate in the buyback?
No. Infosys’s promoters and promoter group members, including Nandan Nilekani and Sudha Murthy, have opted not to participate in this buyback.
7. What is the benefit for retail shareholders?
Retail investors (holding shares worth up to ₹2 lakh) get a 15% reservation in the buyback and can sell shares at a premium price.
8. How is tax calculated on buyback proceeds?
The profit from tendered shares is taxed as capital gains.
- LTCG (held > 1 year): 10% tax
- STCG (held < 1 year): 15% tax
9. How is the acceptance ratio determined?
If total shares tendered exceed the buyback size, acceptance happens on a pro-rata basis, meaning only a certain portion of tendered shares will be accepted.
10. Is participating in the buyback mandatory?
No. Participation is completely voluntary. Shareholders may choose to tender or retain their shares based on their investment goals.
11. What happens to unaccepted shares?
Unaccepted shares remain in the shareholder’s demat account and can be traded or held as usual.
12. What are the key benefits of the buyback for long-term investors?
Even if they don’t participate, long-term investors benefit from improved per-share metrics, reduced share supply, and increased promoter confidence—all of which may support long-term price appreciation.
Conclusion
The Infosys Buyback 2025 is a major financial event in India’s corporate landscape. With an ₹18,000 crore buyback at ₹1,800 per share, Infosys has reaffirmed its strong financial position and commitment to rewarding shareholders.
For retail investors, the buyback presents an opportunity to realize short-term gains, while long-term investors can take comfort in the company’s disciplined approach to capital management.
Regardless of participation, the buyback highlights Infosys’s continued strength, transparency, and consistent focus on enhancing shareholder value—a hallmark of one of India’s most respected technology companies.
